ET Markets
12,140.0084.2
Stock Analysis, IPO, Mutual Funds, Bonds & More

Credit Suisse upgrades Colgate India to outperform on GST tailwinds

The government on Thursday announced GST rates, and said that some items of mass consumption currently taxed at 25-28% will be moved to the lower slab of 18%.

, ET Bureau|
Last Updated: Nov 04, 2016, 12.07 PM IST|Original: Nov 04, 2016, 11.59 AM IST
0Comments
MUMBAI: Credit Suisse has upgraded shares of Colgate Palmolive India to outperform from neutral as it expects the toothpaste maker to see reduction in indirect taxation under Goods and Services Tax from the current taxation of 25-26%.

The brokerage has upgraded earnings estimates for FY18 and FY19 by 3-6% and raised target price on Colgate to Rs 1,150 from Rs 1,000.

"The stock has underperformed peers, being flat YoY, which should now start reversing," it said.

The government on Thursday announced GST rates, and said that some items of mass consumption currently taxed at 25-28% will be moved to the lower slab of 18%.

"While they have not explicitly given the final list, products like soaps, hair oils and toothpaste. We see a very strong possibility of toothpaste being in the 18% rate slab," said Credit Suisse in a note.

For Colgate, the major competitive edge is that competitors Dabur and Patanjali will not benefit from the same as they are already enjoying exemptions, it added. Colgate does not have exemptions on its manufacturing units and pays 25-26% indirect taxes on its toothpaste sales.

Also Read

Headline index valuation fair but not cheap: Credit Suisse

Credit Suisse upgrades United Spirits to outperform, target price Rs 700

Credit Suisse buys Indiabulls Housing shares worth Rs 72 crore

Credit Suisse announces $1 billion 2020 share buyback programme

Credit Suisse downgrades Jubilant FoodWorks to underperform

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service